Articles

DC Circuit Hears Oral Argument in Pole Attachment Appeal

January 24, 2013

Articles

DC Circuit Hears Oral Argument in Pole Attachment Appeal

January 24, 2013

The United States Court of Appeals for the DC Circuit held oral argument on January 23, 2013, on the appeal filed by a coalition of electric utilities challenging the Federal Communications Commission’s (FCC) most recent pole attachment order adopted April 7, 2011.

The appeal filed by a coalition of electric utilities challenged three aspects of the FCC’s April 7, 2011 pole attachment order:

The FCC’s extension of certain pole attachment rights to ILECs even though ILECs are expressly excluded from the definition of “telecommunications carriers” under the Pole Attachment Act.

The new telecommunications attachment rate formula that was lowered to approximate the cable rate under Section 224(d) of the Communications Act.

The revised refund period allowed in a complaint case that will enable the FCC to order a refund or payment as far back in time as the “applicable statute of limitations” instead of from the date the complaint was filed.

The electric utility petitioners argued to the court that the statutory terms “telecommunications carrier” and “provider of telecommunications services” are synonymous, and thus the FCC lacks jurisdiction to regulate attachments by ILECs because the plain language of Section 224 of the Communications Act excludes ILECs from the definition of “telecommunications carriers” entitled to any pole attachment rights. The FCC and the ILEC intervenors countered that the terms are not necessarily equivalent and that the court should follow the general principle that different terms can have different meanings. The FCC asserted that the statutory text is ambiguous and thus it was reasonable and permissible for the FCC to determine that ILECs are providers of telecommunications services under Section 224(a)(4) that are entitled to reasonable rates, terms and conditions under Section 224(b).

On the telecom rate issue, the FCC argued that the term “cost” in Section 224(e) is ambiguous and that the FCC has broad discretion to define the costs of providing space on the pole for telecommunications attachments. The FCC and the non-ILEC intervenors claimed that it was a reasonable decision to interpret the term “cost” to set forth a range for telecom rates that approximate the lower rate paid by cable television systems in order to further the policies of promoting broadband deployment and reducing the disparity in cable and telecom rates. The electric utility petitioners, on the other hand, argued that the term “cost” is unambiguous and that Congress clearly defined this term in Section 224(e) to mean the same costs specified in the cable rate formula in Section 224(d), which are the sum of the operating expenses and actual capital costs of the utility.

While the FCC’s new refund period did not come up at argument, the court will still decide that question based on the parties’ written briefs.

It can take the court a few months to reach a decision after oral argument, so we anticipate that there will likely be a decision by the middle of the year. It is also difficult to predict precisely how the court will ultimately rule based solely on the oral argument, and the FCC or the petitioners could appeal the DC Circuit’s decision to the United States Supreme Court. In the interim, the FCC’s pole attachment rules continue to remain in effect while the court considers the case.